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Stolen identity tax refund fraud

What is a typical scenario for stolen identity tax refund fraud?

Criminals target people who work in a doctor's office, dentist office, nursing home or a hospital who have access to a patient's name, social security number and date of birth. They pay them a flat fee for a certain number of names. The people that work at the doctor's office or hospital need the money. Once they get the social security numbers, they file early in the tax filing season. The actual taxpayer probably has not filed their return yet. With wi-fi access, turbo tax and the personal info, a fraudster can file the tax return. The stolen identity refund fraudsters get the money transferred to a debit card, direct deposit to a bank account, or by treasury check. The recent trend is to get the money on a prepaid debit card. These debit cards are available at any Wal-Mart. GE Capital Retail Bank services Wal-Mart Money Cards.

What criminal charges can be filed in a stolen identity tax refund fraud case?

Conspiracy to defraud the government, aggravated identity theft (minimum mandatory 2 year consecutive sentence), filing false claims, theft of public funds, access device fraud (getting the money out of the ATM) wire fraud, mail fraud, bank fraud, social security fraud (social security numbers are used in each filing) and money laundering can be charged in the indictment for a stolen identity refund fraud charge. A forfeiture count may be added too. The feds will try to get the money back.

What increases the sentence on a stolen identity tax refund fraud case?

The amount of loss and the number of victims can increase the sentencing guideline range for stolen identity tax fraud charges. Depending on the role each person played, there may be a role adjustment in the sentencing guidelines up or down. For instance, an organizer, manager, supervisor or leader will get an enhanced role of generally 2 to 4 levels.

Prosecutors are largely reactive to stolen identity refund fraud

For federal prosecutors, the stolen identity refund fraud cases are largely reactive. They hear from a taxpayer who says “I haven't filed my tax return yet...I tried to and they said I already got a refund.” Or, local cops may seize numerous debit cards and/or treasury checks during an arrest for other charges. Special agent Micheal DePalma, from Miami, in the southern district of Florida, is the identity theft coordinator for ID theft and tax refund fraud.

Who are the players in a stolen identity tax refund fraud case?

Stolen identity refund fraud crime players are: who provides the personal info, who receives the personal info, who prepares and files the false tax return, who gets the money via debit card or check and who is the head honcho.

How do the feds find out about stolen identity tax refund fraud?

Snitches. Also, the local postal worker may have noticed that a crap load of debit cards or treasury checks are being mailed to the same address. He may alert the feds. The IRS Scheme Development Center records the IP addresses of e-filed tax returns. They also track where and when refunds were sent. They can track how many returns were filed from a particular IP address and how much money was transferred to a particular account number – debit card or otherwise. The feds may send a subpoena to the ISP to link the IP address to a particular subscriber. ATM video has put some stolen identity fraudsters behind bars for decades.

What defenses are available to a defendant charged with stolen identity tax refund fraud?

I didn't do it. The accused may claim that somebody else used their wi-fi. They didn't know anything about it. The government has to prove beyond all reasonable doubt that the defendant is the one who committed the crime. The defendant sold the personal info, filed the false tax return or got money from the debit card.

Also, if the defendant was a tax preparer, he thought he was filing a legitimate tax return for a client who stole someone else’s identity. This defense falls flat if the preparer filed multiple returns.

Another defense - I just opened a bank account for a friend and didn't get anything out of it.

What kind of prison time is a stolen identity tax refund fraud defendant looking at?

It depends. None if you beat the charges at trial. Most people convicted of stolen identity refund fraud go to prison for a substantial period of time. Some of them for decades. If convicted, the fraud guidelines under 2B1.1 are generally used. The amount of loss is what drives the guidelines. The actual or intended loss, whichever is greater, is used. The intended loss is always greater in stolen identity fraud cases. The number of victims matters. The greater the number of victims, the greater the guideline range. Use of sophisticated means may be an enhancement as well. Abuse of trust enhancement may apply. If convicted of aggravated identity theft, a 2 year prison sentence consecutive to the other sentence imposed, must be served. However, there are certain crimes that are not predicate crimes for an aggravated identity theft conviction. A defense lawyer will focus on the 3553(a) factors, as they are called, to argue for a variance (a lower sentence).